Enel offers to help build Italy's fibre broadband network

Reuters Staff

3 Min Read

MILAN/ROME (Reuters) - Italian power utility Enel has written to the Italian communications regulator offering to help with building a nationwide ultrafast broadband telecoms network, a move that could bring it into conflict with Telecom Italia.

A man walks past the logo of Italy's biggest utility Enel at the Rome's headquarter November 11, 2014. REUTERS/Tony Gentile

Enel, which is controlled by the Italian government, wrote a letter to the regulator on April 14 saying its domestic network could be used to help install fibre optic cables more cheaply.

“Enel believes it can help develop a key infrastructure for the future of the country,” Enel’s head of Italy Carlo Tamburi said in the letter to AGCOM, which Reuters saw on Monday.

Enel said its contribution would be done “in a synergistic way with what the telecom operators have done and planned”, bringing clear benefits to less populated and industrial areas.

Prime Minister Matteo Renzi is backing a 12 billion-euro ($13.35 billion) project aimed at getting 85 percent of the population connected up to a fibre optic network within six years, using Metroweb, a company partly owned by state lender Cassa Depositi e Prestiti (CDP).

But that plan has run into disagreements with Telecom Italia over ownership, technology and the pace of investments, as well as by uncertain regulations.

Last week Telecom Italia said talks with the government about its plan to buy into Metroweb had not gone in the right direction but could be resumed under the right conditions.

On Monday La Repubblica newspaper said in a front-page article that Rome wanted to use Enel to bring the new fibre optic network under public control.

Telecom Italia’s shares were down 1.8 percent at 1.041 euros by 1639 London time. Enel’s shares were down 0.5 percent at 4.2 euros.

Enel, which is focusing much of its domestic strategy on developing its power distribution grid and smart digital technology, has about 1.2 million km of power lines and 450,000 power distribution cabinets across Italy.

The utility, which has 31 million power and gas retail clients in Italy, set up Wind, the third biggest of Italy’s four mobile network operators, which is now owned by Vimpelcom.`

CDP, which owns the government stake in Metroweb, had been hoping to bring Telecom Italia on board along with other network operators including Vodafone, a scenario which the former national monopoly phone company is not willing to accept.